Print page
Email page
Download PDF
« Previous Release | Next Release »
NEW YORK, NEW YORK, May 06, 2009 (MARKETWIRE via COMTEX News Network) -- Crystal River Capital, Inc. ("Crystal River" or the "Company") (OTCBB: CYRV) -
Crystal River's management will host a dial-in teleconference to review its first quarter 2009 financial results on May 7, 2009 at 9:00 a.m. (EDT). The teleconference can be accessed by dialing 888-221-9542 or 913-312-0641 (International). A replay of the recorded teleconference will be available through May 21, 2009. The replay can be accessed by dialing 888-203-1112 or 719-457-0820 (International) and entering passcode 7542945. A live audio webcast of the call will be accessible on the Company's website, www.crystalriverreit.com, via a link from the Investor Relations section. A replay of the audio webcast will be archived in the Investor Relations section of the Company's website.
Crystal River Capital, Inc. ("Crystal River" or the "Company") (OTCBB: CYRV) today announced its results for the quarter ended March 31, 2009.
Separately, the Company announced that its Board of Directors has declared a second quarter 2009 dividend of $0.10 per share.
For additional information, please refer to Crystal River's letter to stockholders, which has been posted to the Investor Relations section of the Company's website at www.crystalriverreit.com.
I. FIRST QUARTER UPDATE
- Liquidity and leverage update: After eliminating its repurchase agreement debt in the fourth quarter of 2008, Crystal River continued its focus on reducing leverage by decreasing the amount drawn under the Company's revolving credit facility to $28.9 million at March 31, 2009 from $32.9 million at December 31, 2008.
- Operating results: The net loss for the quarter ended March 31, 2009 totaled $10.0 million, or $0.40 per share, compared to a net loss of $137.7 million, or $5.56 per share, for the first quarter of 2008 and a net loss of $37.1 million, or $1.48 per share, for the fourth quarter of 2008. The primary contributors to the first quarter 2009 net loss were a $5.8 million impairment charge against the Company's available-for-sale securities and a $9.9 million net decrease in assets and liabilities valued under fair value option, which was partially offset by realized and unrealized gains on derivatives totaling $3.9 million. Finally, the Company also recorded a $6.8 million loan loss allowance on its real estate loan holdings during the quarter ended March 31, 2009.
Operating Earnings (defined below) for the quarter ended March 31, 2009 totaled $8.5 million, or $0.34 per share, compared to $19.5 million, or $0.79 per share, for the first quarter of 2008 and $17.1 million, or $0.68 per share, for the fourth quarter of 2008. The decrease compared to the first quarter of 2008 was primarily attributable to lower interest income resulting from the sale of the Company's Agency MBS portfolio in 2008. The decrease compared to the fourth quarter of 2008 was primarily attributable to lower principal payment receipts on previously written-off residential mortgage-backed securities.
- Dividend coverage: Cash flow from operations for the first quarter of 2009 represented in excess of two times coverage of the current dividend of approximately $2.5 million, and the remainder was used to pay down liabilities.
Dividend Information
Crystal River announced that its Board of Directors declared a cash distribution for the quarter ended June 30, 2009 of $0.10 per share of common stock. The cash distribution will be paid on July 31, 2009 to stockholders of record as of the close of business on June 30, 2009.
In setting the dividend, the Board of Directors considered a number of factors, including, but not limited to, operating results, taxable income and REIT qualification requirements, available tax losses, economic conditions, capital requirements, liquidity, retention of capital and other operating trends. Given the variability of these considerations, the Board of Directors will continually reevaluate these factors when determining future dividends.
About Crystal River
Crystal River Capital, Inc. (OTCBB: CYRV) is a specialty finance REIT. The Company invests in commercial real estate, real estate loans, and real estate-related securities, such as commercial and residential mortgage-backed securities. For more information, visit www.crystalriverreit.com.
II. CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets (Unaudited)
----------------------------------------------------------------------------
(in thousands, except share March 31, December 31, March 31,
and per share data) 2009 2008 2008
----------------------------------------------------------------------------
ASSETS
Available-for-sale securities,
at fair value $ 53,562 $ 72,916 $ 355,528
Real estate loans 2,514 9,034 50,768
Real estate loans held for sale 5,058 5,058 107,345
Commercial real estate, net 226,632 228,259 233,137
Other investments 1,550 1,550 1,550
Intangible assets 74,132 75,541 79,765
Cash and cash equivalents 1,499 6,239 8,664
Restricted cash 25,186 26,107 27,455
Receivables 7,434 7,297 16,835
Rent enhancement receivable,
related party 13,198 13,828 15,665
Due from broker - - 393,566
Prepaid expenses and other assets 296 939 2,177
Deferred financing costs, net 1,514 1,533 2,152
------------- ------------ ------------
Total Assets $ 412,575 $ 448,301 $ 1,294,607
------------- ------------ ------------
------------- ------------ ------------
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Liabilities
Accounts payable, accrued
expenses and other $ 3,826 $ 2,652 $ 728
Due to manager - - 693
Due to affiliate - - 439
Dividends payable 2,511 2,511 16,835
Intangible liabilities 70,895 72,265 76,375
Repurchase agreements - - 408,677
Collateralized debt obligations 35,521 45,429 182,769
Junior subordinated notes 51,550 51,550 51,550
Mortgages payable 219,380 219,380 219,380
Senior mortgage-backed notes,
related party - - 99,143
Secured revolving credit
facility, related party 28,920 32,920 48,220
Interest payable 2,088 1,357 3,610
Derivative liabilities 47,067 57,646 53,545
------------- ------------ ------------
Total Liabilities 461,758 485,710 1,161,964
------------- ------------ ------------
------------- ------------ ------------
Commitments and Contingencies
Stockholders' Equity (Deficit)
Preferred stock, par value
$0.001 per share, 100,000,000
shares authorized, no shares
issued and outstanding - - -
Common stock, $0.001 par value,
500,000,000 shares authorized,
24,905,253; 24,905,252; and
24,704,945 shares issued and
outstanding, respectively 25 25 25
Additional paid-in capital 564,615 564,560 563,064
Accumulated other comprehensive
loss (9,152) (9,815) (20,135)
Accumulated deficit (604,671) (592,179) (410,311)
------------- ------------ ------------
Total Stockholders' Equity
(Deficit) (49,183) (37,409) 132,643
------------- ------------ ------------
Total Liabilities and
Stockholders' Equity (Deficit) $ 412,575 $ 448,301 $ 1,294,607
------------- ------------ ------------
------------- ------------ ------------
Condensed Consolidated Statements of Operations (Unaudited)
----------------------------------------------------------------------------
Three months ended
(in thousands, except share
and per share data) March 31, 2009 Dec. 31, 2008 March 31, 2008
----------------------------------------------------------------------------
Revenues
Interest income - available
-for-sale securities $ 13,888 $ 24,092 $ 39,937
Interest income - real
estate loans 458 812 2,612
Other interest and dividend
income 19 124 669
--------------- -------------- ---------------
Total interest and
dividend income 14,365 25,028 43,218
Rental income, net 5,604 5,614 5,662 --------------- -------------- ---------------
Total revenues 19,969 30,642 48,880
--------------- -------------- ---------------
Expenses
Interest expense 6,533 9,241 24,268
Management fees, related
party - (102) 667
Professional fees 444 948 668
Depreciation and
amortization 3,022 3,022 3,022
Insurance expense 424 372 330
Directors' fees 85 85 153
Public company expense 111 150 111
Commercial real estate
expenses 393 356 417
Provision for loss on
real estate loans 6,758 6,223 9,063
Other expenses 82 126 376
--------------- -------------- ---------------
Total expenses 17,852 20,421 39,075
--------------- -------------- ---------------
Other Revenues (Expenses)
Realized net gain (loss)
on sale of available-
for-sale securities, real
estate loans and other
investments 40 (215) (3,785)
Realized and unrealized
gain (loss) on derivatives 3,871 (26,496) (43,382)
Impairment of available-
for-sale securities (5,784) (30,576) (67,154)
Net change in assets and
liabilities valued under
fair value option (9,876) 10,800 (32,848)
Loss from equity investments - - (40)
Other (349) (857) (282)
--------------- -------------- ---------------
Total other expenses (12,098) (47,344) (147,491)
--------------- -------------- ---------------
Net Loss $ (9,981) $ (37,123) $ (137,686)
--------------- -------------- ---------------
--------------- -------------- ---------------
Net loss per share
- basic and diluted $ (0.40) $ (1.48) $ (5.56)
--------------- -------------- ---------------
--------------- -------------- ---------------
Weighted average shares of
common stock
outstanding:(1)
Basic and diluted 25,131,361 25,022,733 24,750,048
--------------- -------------- ---------------
--------------- -------------- ---------------
Dividends declared per
share of common stock $ 0.10 $ 0.10 $ 0.68
--------------- -------------- ---------------
--------------- -------------- ---------------
----------------------------------------------------------------------------
(1) Including other participating securities.
Net Investment Income (Unaudited)
----------------------------------------------------------------------------
Three months ended
(in thousands, except share
and per share data) March 31, 2009 Dec. 31, 2008 March 31, 2008
----------------------------------------------------------------------------
Total interest and dividend
income $ 14,365 $ 25,028 $ 43,218
Rental income, net 5,604 5,614 5,662
Loss from equity investments - - (40)
Interest expense (6,533) (9,241) (24,268)
--------------- -------------- ---------------
Net Investment Income $ 13,436 $ 21,401 $ 24,572
--------------- -------------- ---------------
--------------- -------------- ---------------
Net Investment Income Per
Share $ 0.53 $ 0.86 $ 0.99
--------------- -------------- ---------------
--------------- -------------- ---------------
Weighted average shares of
common stock outstanding:
Basic and diluted 25,131,361 25,022,733 24,750,048
--------------- -------------- ---------------
--------------- -------------- ---------------
----------------------------------------------------------------------------
Reconciliation of Net Loss to Operating Earnings (Unaudited)
----------------------------------------------------------------------------
Three months ended
(in thousands, except share
and per share data) March 31, 2009 Dec. 31, 2008 March 31, 2008
----------------------------------------------------------------------------
Net Loss $ (9,981) $ (37,123) $ (137,686)
Realized net (gain) loss on
sale of available-for-sale
securities, real estate
loans, and other
investments (40) 215 3,785
Realized and unrealized
(gain) loss on derivatives (3,871) 26,496 43,382
Impairment of available-
for-sale securities 5,784 30,576 67,154
Net change in assets and
liabilities valued under
fair value option 9,876 (10,800) 32,848
Provision for loss on real
estate loans 6,758 6,223 9,063
Depreciation and
amortization 3,022 3,022 3,022
Cash settlements on
economic hedges that did
not qualify for hedge
accounting treatment (3,051) (1,530) (2,044)
--------------- -------------- ---------------
Operating Earnings $ 8,497 $ 17,079 $ 19,524
--------------- -------------- ---------------
--------------- -------------- ---------------
Operating Earnings Per
Share $ 0.34 $ 0.68 $ 0.79
--------------- -------------- ---------------
--------------- -------------- ---------------
Weighted average number of
shares outstanding:
Basic and diluted 25,131,361 25,022,733 24,750,048
--------------- -------------- ---------------
--------------- -------------- ---------------
----------------------------------------------------------------------------
Comprehensive Loss (Unaudited)
----------------------------------------------------------------------------
Three months ended
(in thousands) March 31, 2009 Dec. 31, 2008 March 31, 2008
----------------------------------------------------------------------------
Net Loss $ (9,981) $ (37,123) $ (137,686)
Changes in OCI - securities
available for sale 195 (112) (7,983)
Realization of deferred
unrealized losses on cash
flow hedges - - 4,854
Amortization of net realized
losses on cash flow hedges
into interest expense 468 468 145
----------------------------------------------------------------------------
Comprehensive Loss $ (9,318) $ (36,767) $ (140,670)
----------------------------------------------------------------------------
Reconciliation of Net Loss to Estimated REIT Taxable Income (Unaudited)
----------------------------------------------------------------------------
Three months Three months
(in thousands, except share ended ended
and per share data) March 31, 2009 March 31, 2008
----------------------------------------------------------------------------
GAAP net loss $ (9,981) $ (137,686)
-------------- --------------
Adjustments to GAAP net loss:
Net loss of taxable REIT subsidiary - 495
Share-based compensation 49 (182)
Net tax adjustments related to interest
income 5,602 (2,621)
Book derivative loss in excess of tax
loss (income in excess of tax income) (7,090) 12,875
Deductible REMIC losses (9,004) 284
Capital-loss limitation 4,067 33,749
Impairment losses not deductible for
tax purposes 5,784 67,154
Net change in assets and liabilities
valued under fair value option 9,876 32,848
Loan loss allowance not deductible
for tax purposes 6,718 9,063
GAAP-to-tax difference on rent
escalation and lease amortization (331) (381)
Other - (22) -------------- --------------
Net adjustments from GAAP net loss to
estimated REIT taxable income 15,671 153,262
-------------- --------------
Estimated REIT Taxable Income 5,690 15,576
-------------- --------------
Estimated REIT Taxable Income per share(1) $ 0.23 $ 0.63
-------------- --------------
-------------- --------------
Weighted average number of shares
outstanding:
Basic and diluted 25,131,361 24,750,048
-------------- --------------
-------------- --------------
----------------------------------------------------------------------------
(1) As a REIT, Crystal River is required to distribute the greater of 90% of
(a) its REIT taxable income and (b) the excess inclusion income
generated by its CDOs.
III. SUPPLEMENTAL INFORMATION
Total Investment Portfolio at March 31, 2009
The following table summarizes the Company's investment portfolio at March 31, 2009, December 31, 2008, and March 31, 2008:
-----------------------------------------------------------------------
-----
March 31, 2009 December 31, 2008 March 31, 2008
($ in millions) Carrying Carrying Carrying
Value % Total Value % Total Value % Total
----------------------------------------------------------------------------
Available for
sale securities
CMBS $ 44.6 15.4% $ 58.1 18.3% $ 271.1 36.2%
Prime RMBS 6.1 2.1% 9.2 2.9% 56.3 7.5%
Subprime RMBS 2.9 1.0% 5.6 1.8% 28.0 3.7%
Preferred stock 0.0 0.0% 0.0 0.0% 0.1 0.0%
Direct real estate
loans
Construction loans - - 0.4 0.1% 16.4 2.2%
Mezzanine loans 5.1(1) 1.8% 11.2(1) 3.5% 31.9 4.3%
Whole loans 2.5 0.9% 2.5 0.8% 109.8 14.7%
Commercial real
estate-owned(2) 226.6 78.2% 228.3 72.1% 233.1 31.2%
Other 1.6 0.6% 1.6 0.5% 1.6 0.2%
----------------------------------------------------------------------------
Total $ 289.4 100.0% $ 316.9 100.0% $ 748.3 100.0%
----------------------------------------------------------------------------
(1) Includes one loan in the amount of $5.1 million held for sale.
(2) Excludes intangible assets.
First Quarter 2009 Securities Roll-Forward Table
The table below details the impact of purchases and sales, principal paydowns, premium and discount amortization, and market value adjustments on our available-for-sale securities during the first quarter of 2009:
----------------------------------------------------------------------- ----- (in millions) CMBS Prime RMBS Subprime RMBS Total Portfolio ---------------------------------------------------------------------------- Carrying Value December 31, 2008 $ 58.1 $ 9.2 $ 5.6 $ 72.9 Sales - - - - Principal paydowns - - - - Principal loss - (0.3) (0.1) (0.4) Amortization 0.6 0.5 - 1.1 Market value adjustments: CDO assets (11.0) (1.7) (1.7) (14.4) Non-CDO assets (3.3) (1.6) (0.9) (5.8) OCI 0.2 - - 0.2 ---------------------------------------------------------------------------- Carrying Value March 31, 2009 $ 44.6 $ 6.1 $ 2.9 $ 53.6 ----------------------------------------------------------------------------
COMMERCIAL REAL ESTATE ("CRE") INVESTMENT PORTFOLIO
At March 31, 2009, Crystal River's CRE investment portfolio totaled $229.9 million. The CRE portfolio consists of three high-quality office buildings 100% leased on a triple-net basis to JPMorgan Chase. The buildings are financed with long-term fixed-rate mortgage loans.
CRE investment portfolio at March 31, 2009:
----------------------------------------------------------------------------
Total
Year of Area Book Mortgage Net Book
Lease (000s Value(1) Debt Equity
Location Tenant Expiry Sq. Ft.) (Millions) (Millions) (Millions)
----------------------------------------------------------------------------
Houston,
Texas JPMorgan Chase 2021 428.6 $ 59.9 $ 53.4 $ 6.5
Arlington,
Texas JPMorgan Chase 2027 171.5 21.3 20.9 0.4
Phoenix,
Arizona JPMorgan Chase 2021 724.0 148.7 145.1 3.6
----------------------------------------------------------------------------
Total CRE 1,324.1 $ 229.9 $ 219.4 $ 10.5
----------------------------------------------------------------------------
(1) Book value includes intangible assets and intangible liabilities, but
excludes rent-enhancement and straight-line rent receivables.
REAL ESTATE LOAN INVESTMENT PORTFOLIO
At March 31, 2009, Crystal River's real estate loan portfolio, which consists of two mezzanine loans (one of which is held for sale), a construction loan and a whole loan, totaled $7.6 million and had a weighted average interest rate of 9.3%. Crystal River recorded a $6.8 million loan loss allowance on its real estate loan holdings during the quarter ended March 31, 2009.
Real estate loan portfolio at March 31, 2009:
----------------------------------------------------------------------------
Construction
Mezzanine Loans Loans Whole Loans Total / WA(1)
($ in
millions) Fixed Floating Fixed Floating Fixed Floating Fixed Floating
----------------------------------------------------------------------------
Outstanding
Face Amount $ 17.4 $ - $ 14.6 $ - $ - $ 2.5 $ 32.0 $ 2.5
Carrying
Value 5.1 - 0.0 - - 2.5 5.1 2.5
Amortized
Cost 17.4 - 14.6 - - 2.5 32.0 2.5
Fair Value 5.1 - 0.0 - - 1.8 5.1 1.8
Number of
Loans 2 - 1 - - 1 3 1
Number of
loans that
are
delinquent 1 - 1 - - - 2 -
WA Fixed
Rate 10.12% - 16.00%(3) - - n/a 10.12%(4) n/a
WA Floating
Rate:
Spread over
LIBOR(2) n/a - n/a - - 3.25% n/a 3.25%
----------------------------------------------------------------------------
(1) Weighted Average ("WA").
(2) London Interbank Offered Rate ("LIBOR").
(3) Construction loan has been placed on non-accrual status.
(4) Excludes 16.00% WA fixed rate for construction loan.
CMBS INVESTMENT PORTFOLIO
CMBS portfolio by credit rating at March 31, 2009:
----------------------------------------------------------------------------
Weighted Average
----------------------------
($ in millions) Amortized Cost Carrying Value Yield(1) Term (Yrs)(2)
----------------------------------------------------------------------------
BBB $ 9.4 $ 9.8 63.3% 8.4
BB 6.8 6.8 94.6% 9.7
B 11.3 11.3 118.8% 7.7
Below B 15.7 16.7 154.8% 3.8
----------------------------------------------------------------------------
Total CMBS $ 43.2 $ 44.6 116.5% 6.7
----------------------------------------------------------------------------
(1) Yield is the implied loss-adjusted yield based on our expectation of
future cash flows and the fair value of the security.
(2) Refers to the loss-adjusted weighted average remaining life.
Credit Characteristics of CMBS portfolio by vintage at March 31, 2009:
CDO Assets:
----------------------------------------------------------------------------
Princ-
ipal Delin- Cumul-
Original Outstanding Subord- quency ative
WA Face Face Carrying inat- 60+/FC Loss to
Vintage Rating(1) Amount Amount Value ion /REO(2) Date(3)
----------------------------------------------------------------------------
Pre-2005 B $ 2.8 $ 2.8 $ 0.5 3.63% 1.54% 0.00%
2005 B+ 244.8 244.8 18.3 2.61% 1.40% 0.00%
2006 B- 248.3 248.3 12.4 2.29% 1.10% 0.00%
2007 CCC- 27.9 27.9 1.3 2.69% 0.64% 0.00%
----------------------------------------------------------------------------
Total
CMBS B $ 523.8 $ 523.8 $ 32.5 2.47% 1.22% 0.00%
----------------------------------------------------------------------------
(1) Rounded to nearest rating.
(2) "60+" means that a payment on an underlying collateral loan is more than
60 days past due; "FC" means that the collateral underlying the loan is under foreclosure; "REO" means that the collateral underlying the loan
has been foreclosed and is owned by the issuing trust. Delinquency rates
refer to the entire securitization.
(3) Actual losses against securities in Crystal River's portfolio, based on
original face amount.
Non-CDO Assets:
----------------------------------------------------------------------------
Princ-
ipal Delin- Cumul-
Original Outstanding Subord- quency ative
WA Face Face Carrying inat- 60+/FC Loss to
Vintage Rating Amount Amount Value ion /REO Date
----------------------------------------------------------------------------
2005 NR $ 50.8 $ 43.3 $ 2.6 0.21% 1.18% 14.82%
2006 CC+ 119.6 119.6 4.7 0.60% 1.37% 0.00%
2007 CC+ 132.8 132.8 4.8 1.17% 1.06% 0.00%
----------------------------------------------------------------------------
Total
CMBS CC+ $ 303.2 $ 295.7 $ 12.1 0.78% 1.20% 2.48%
----------------------------------------------------------------------------
PRIME RMBS INVESTMENT PORTFOLIO
Prime RMBS portfolio by credit rating at March 31, 2009:
----------------------------------------------------------------------------
Weighted Average
------------------------
($ in millions) Amortized Cost Carrying Value Yield Term (Yrs)
----------------------------------------------------------------------------
BB and above $ 1.2 $ 1.2 116.1% 10.8
B 1.8 1.8 137.3% 6.1
Below B 3.0 3.1 290.9% 3.3
----------------------------------------------------------------------------
Total Prime RMBS $ 6.0 $ 6.1 210.3% 5.7
----------------------------------------------------------------------------
Credit Characteristics of Prime RMBS portfolio by vintage at March 31, 2009:
CDO Assets:
----------------------------------------------------------------------------
Princ-
ipal Delin- Cumul-
Original Outstanding Subord- quency ative
WA Face Face Carrying inat- 60+/FC Loss to
Vintage Rating Amount Amount Value ion /REO Date
----------------------------------------------------------------------------
2003 B $ 1.9 $ 1.8 $ 0.5 0.23% 0.54% 0.00%
2004 CCC- 18.8 12.5 0.6 1.25% 12.46% 0.65%
2005 CCC 92.9 71.0 2.3 1.02% 14.30% 2.66%
----------------------------------------------------------------------------
Total
Prime
RMBS CCC $ 113.6 $ 85.3 $ 3.4 1.04% 13.74% 2.36%
----------------------------------------------------------------------------
Non-CDO Assets:
----------------------------------------------------------------------------
Princ-
ipal Delin- Cumul-
Original Outstanding Subord- quency ative
WA Face Face Carrying inat- 60+/FC Loss to
Vintage Rating Amount Amount Value ion /REO Date
----------------------------------------------------------------------------
2003 CC+ $ 1.9 $ 1.7 $ 0.2 0.00% 0.54% 0.76%
2004 CC+ 3.0 1.1 - 0.00% 2.24% 61.17%
2005 CC+ 93.5 61.2 1.9 0.44% 8.48% 7.18%
2006 CC+ 4.0 3.8 0.2 0.43% 1.91% 0.00%
2007 CC+ 17.1 14.2 0.4 0.14% 2.93% 20.32%
----------------------------------------------------------------------------
Total
Prime
RMBS CC+ $ 119.5 $ 82.0 $ 2.7 0.37% 6.97% 8.40%
----------------------------------------------------------------------------
SUBPRIME RMBS INVESTMENT PORTFOLIO
Subprime RMBS portfolio by credit rating at March 31, 2009:
----------------------------------------------------------------------------
Weighted Average
------------------------
($ in millions) Amortized Cost Carrying Value Yield Term (Yrs)
----------------------------------------------------------------------------
BBB $ 0.9 $ 0.9 58.0% 4.5
BB 0.1 0.1 191.2% 2.4
B 0.2 0.2 33.1% 16.1
Below B 1.6 1.7 333.2% 4.0
----------------------------------------------------------------------------
Total Subprime RMBS $ 2.8 $ 2.9 223.0% 4.9
----------------------------------------------------------------------------
Credit Characteristics of Subprime RMBS portfolio by vintage at March 31,
2009:
CDO Assets:
----------------------------------------------------------------------------
Princ-
ipal Delin- Cumul-
Original Outstanding Subord- quency ative
WA Face Face Carrying inat- 60+/FC Loss to
Vintage Rating Amount Amount Value ion /REO Date
----------------------------------------------------------------------------
2005 CC+ $ 78.8 $ 53.6 $ 1.1 4.92% 32.07% 11.41%
----------------------------------------------------------------------------
Total
Subprime
RMBS CC+ $ 78.8 $ 53.6 $ 1.1 4.92% 32.07% 11.41%
----------------------------------------------------------------------------
Non-CDO Assets:
----------------------------------------------------------------------------
Princ-
ipal Delin- Cumul-
Original Outstanding Subord- quency ative
WA Face Face Carrying inat- 60+/FC Loss to
Vintage Rating Amount Amount Value ion /REO Date
----------------------------------------------------------------------------
2005 BB $ 23.6 $ 16.2 $ 0.6 0.30% 35.50% 15.87%
2006 B- 25.2 22.0 0.7 2.54% 30.68% 12.27%
2007 NR 9.1 9.1 0.5 2.13% 28.46% 0.00%
----------------------------------------------------------------------------
Total
Subprime
RMBS CCC- $ 57.9 $ 47.3 $ 1.8 1.70% 31.90% 11.79%
----------------------------------------------------------------------------
Financing Details
The following table shows the Company's available-for-sale securities, real estate loans, other investments and other assets as of March 31, 2009 and the different lines used to finance such assets, categorized by (i) CDO debt, (ii) other term debt, such as mortgage loans on commercial real estate and trust preferred securities and (iii) the Company's secured revolving credit facility:
-----------------------------------------------------------------------
-----
Assets Debt
----------------------------------------------------------------------------
CDO Other Term Funding
($ in millions) Carrying Value Debt(1) Debt Facility
----------------------------------------------------------------------------
CMBS $ 44.6 $ 31.3 $ - $ -
Prime RMBS 6.1 3.2 - -
Subprime RMBS 2.9 1.0 - -
Real estate loans 7.6 - - 9.3
Commercial real estate 226.6 - 219.4 19.6
Trust Preferred
Securities - - 51.6 -
Other 124.8 - - -
----------------------------------------------------------------------------
Total $ 412.6 $ 35.5 $ 271.0 $ 28.9
----------------------------------------------------------------------------
(1) CDO debt has been allocated based upon the asset mix within the
Company's CDOs.
CDO and Non-CDO Assets
The table below summarizes the breakdown of our available-for-sale securities between assets held by non-recourse securitization subsidiaries financed by CDO debt and assets held directly at March 31, 2009:
-----------------------------------------------------------------------
-----
Consolidated
($ in millions) Carrying Value CDO Assets Non-CDO Assets
----------------------------------------------------------------------------
CMBS $ 44.6 $ 32.5 $ 12.1
Prime RMBS 6.1 3.4 2.7
Subprime RMBS 2.9 1.1 1.8
----------------------------------------------------------------------------Total $ 53.6 $ 37.0 $ 16.6
----------------------------------------------------------------------------
Our securitized assets are held by two non-recourse securitization subsidiaries financed by CDO debt. The table below details the assets and liabilities of these securitizations at March 31, 2009:
-----------------------------------------------------------------------
-----
Consolidated
Outstanding Consolidated
($ in millions) Face Amount Carrying Value CDO I CDO II
----------------------------------------------------------------------------
CMBS $ 523.8 $ 32.5 $ 7.5 $ 25.0
Prime RMBS 85.3 3.4 3.4 -
Subprime RMBS 53.6 1.1 1.1 -
Receivables, cash
and other assets - 4.4 1.8 2.6
Collateralized debt
obligations (461.7) (35.5) (11.1) (24.4)
Derivative and other
liabilities, net - (31.9) (4.4) (27.5)
----------------------------------------------------------------------------
Net Equity $ 201.0 $ (26.0) $ (1.7) $ (24.3)
----------------------------------------------------------------------------
OTHER INFORMATION
The Company will file a Form 10-Q for the quarter ended March 31, 2009 with the Securities and Exchange Commission. Please read the Form 10-Q carefully as it will contain Crystal River's consolidated financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations. The Form 10-Q also will be made available under the Investor Relations section of Crystal River's website at www.crystalriverreit.com.
Definition of Operating Earnings
This press release and accompanying financial information make reference to Operating Earnings on a total and per share basis. The Company considers its Operating Earnings to be income after operating expenses but before loan loss provisions, realized and unrealized gains and losses, hedge ineffectiveness, foreign currency exchange impact, loss on impairment of assets, commercial real estate depreciation and amortization and net change in assets and liabilities valued under fair value option. The Company believes that Operating Earnings provides useful information to investors because it views Operating Earnings as an effective indicator of the Company's profitability and financial performance over time. Operating Earnings can and will fluctuate based on changes in asset levels, funding rates, available reinvestment rates, expected losses on credit-sensitive positions and the return on the Company's investments as the underlying assets are carried at estimated fair value. The Company has provided the components of Operating Earnings and a full reconciliation from net loss to Operating Earnings with the financial statements accompanying this press release. Operating Earnings is a non-GAAP measure that does not have any standard meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies.
Definition of Net Investment Income
This press release and accompanying financial information make reference to Net Investment Income. The Company considers its Net Investment Income to be total revenues, including income (loss) from equity investments, less interest expense. The Company believes that Net Investment Income provides useful information to investors because it represents the largest component of the Company's Operating Earnings, which management believes is an effective indicator of the Company's profitability and financial performance over time. The Company provides the components of Net Investment Income with the financial statements accompanying this press release. Net Investment Income is a non-GAAP measure that does not have any standard meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies.
Definition of Estimated REIT Taxable Income
Estimated REIT Taxable Income is a non-GAAP financial measure and does not purport to be an alternative to net loss determined in accordance with GAAP as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Estimated REIT Taxable Income excludes the net loss of Crystal River's domestic taxable REIT subsidiary. This non-GAAP financial measure is important to Crystal River and its stockholders because, as a real estate investment trust, we are required to pay substantially all of our REIT taxable income in the form of distributions to our stockholders and Estimated REIT Taxable Income is an effective indicator of the total amount of REIT taxable income available for distributions. Because not all REITs use identical calculations, this presentation of Estimated REIT Taxable Income may not be comparable to other similarly titled measures prepared and reported by other companies. The Company provides a full reconciliation from net loss to Estimated REIT Taxable Income with the financial statements accompanying this press release.
Forward-Looking Information
This news release, and our public documents to which we refer, contain or incorporate by reference certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to our future financial results and future dividend payments. Forward-looking statements that are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "anticipate," "continue," "should," "intend," or similar terms or variations on those terms or the negative of those terms. Although we believe that the expectations contained in any forward-looking statement are based on reasonable assumptions, we can give no assurance that our expectations will be attained. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to, changes in interest rates, changes in the yield curve, changes in prepayment rates, the effectiveness of our hedging strategies, the availability of mortgage-backed securities and other targeted investments for purchase and origination, the availability and cost of capital for financing future investments and, if available, the terms of any such financing, changes in the market value of our assets, future margin reductions and the availability of liquid assets to post additional collateral, changes in business conditions and the general economy, competition within the specialty finance sector, changes in government regulations affecting our business, our ability to maintain our qualification as a real estate investment trust for federal income tax purposes, and other risks disclosed from time to time in our filings with the Securities and Exchange Commission. For more information on the risks facing the Company, see the risk factors in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, which we filed with the SEC on March 3, 2009, and the risk factors in Exhibit 99.1 to our Form 10-Q for the period ended March 31, 2009, which we expect to file with the SEC on or before May 11, 2009. We do not undertake, and specifically disclaim any obligation, to publicly release any update or supplement to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
Contacts: Jody Sheu Crystal River Capital, Inc. (212) 549-8346 jsheu@crystalriverreit.com (CRZ-F)
SOURCE: Crystal River Capital, Inc.
mailto:jsheu@crystalriverreit.com
Copyright 2009 Marketwire, Inc., All rights reserved.
News Provided by COMTEX